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Malaysia Expects Inflation
To Follow Cut in Fuel Subsidies

KUALA LUMPUR, Malaysia -- The Malaysian government sharply raised fuel prices to trim a ballooning fuel-subsidy bill, and interest rates and inflation are expected to rise as a result.

Prime Minister Abdullah Ahmad Badawi's cabinet said it will increase the retail price of gasoline by 19% and of diesel fuel by 23%, the sharpest increases in two years. The price of liquefied petroleum gas was raised by 21%.